Subsidy-Reliant Offshore Wind Steals Skills, Ideas From Big Oil
Oil workers are bringing other skills with them, from safety expertise to software design and techniques to extend the life of assets. Dolf Elsevier van Griethuysen of Van Oord's wind division said the oil sector downturn had made tenders to build offshore installations more competitive and lowered prices.
The UK oil and gas industry lost 110,000 jobs between 2013 and 2016, according to industry lobby Oil & Gas UK. The offshore wind industry employs over 13,000 people in Britain and has the potential to provide 44,000 jobs in the next 10 years, said RenewableUK, another industry body.
"When oil prices were still high, competition for talent was a big headache for the wind industry, because we simply couldn't pay the same salaries. But that has significantly changed," said Martin Neuberts, DONG Energy's chief strategy officer.
DASH FOR SCALE
DONG Energy said in September it would build the UK's largest offshore wind maintenance hub in northeast England to service its offshore wind farms. On the Essex coast of eastern England, it repurposed Europe's biggest drilling rig to help lay power cables to connect offshore wind farms with the main grid.
As the onshore business' younger sibling, offshore accounts for only 8 percent of Europe's total installed 142 gigawatt wind capacity, which covers 11 percent of EU electricity demand.
Many European governments are keen for that percentage to rise after they led the way in developing offshore wind. But few of the continent's cash-strapped governments have given firm plans for support beyond 2020.
Developers need to keep costs tumbling for it to have a future. The key to that is dependable government support and continued rapid expansion: 4-7 GW of new capacity is needed each year to bring costs below 80 euros per MWh from around 125 euros now, according to the industry.
Coal is still the cheapest energy source at between 50 and 90 euros per megawatt hour, according to industry group WindEurope. But advocates of offshore wind say it is already proving it can kick its addiction to state subsidies.
A little over a year after winning a 400 MW order for Horns Rev 3 in the Danish North Sea at a production price of 103.1 euros per megawatt hour, Vattenfall won a Danish near-shore project in September by promising to produce power at 63.8 euros per megawatt hour. Just last week, Vattenfall won the 600 MW Kriegers Flak project by bidding to produce power at a record 49.9 euros per megawatt hour. The company aims to build subsidy-free offshore wind by 2025.
Scale is the industry's biggest ally. Bigger turbines offer cheaper raw materials, installation and maintenance per unit of energy. Average turbine size in Europe in the first half of 2016 rose to 4.8 megawatt, 15 percent more than just a year earlier, according to WindEurope.
MHI Vestas' and Siemens' behemoth 8 megawatt wind turbines set new industry standards when the first was erected in September off Britain's west coast near Liverpool.
Rising almost 200 meters into the sky, their blades sweep an area larger than the London Eye.
(Additional reporting by Jacob Gronholt-Pedersen and Karolin Schaps; editing by Alister Doyle and David Evans)
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Rooftop Solar Now 4th Largest Source of Electricity in Australia
- US Confirms Reimposition of Oil Sanctions against Venezuela
- Analyst Says USA Influence on Middle East Seems to be Fading
- EU, Industry Players Ink Charter to Meet Solar Energy Targets
- Russian Ships to Remain Banned from US Ports
- Brazil Court Reinstates Petrobras Chair to Divided Board
- EIB Lends $425.7 Million for Thuringia's Grid Upgrades
- Var Energi Confirms Oil Discovery in Ringhorne
- Seatrium, Shell Strengthen Floating Production Systems Collaboration
- An Already Bad Situation in the Red Sea Just Got Worse
- What's Next for Oil? Analysts Weigh In After Iran's Attack
- USA Regional Banks Dramatically Step Up Loans to Oil and Gas
- EIA Raises WTI Oil Price Forecasts
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Venezuela Authorities Arrest Two Senior Energy Officials
- Namibia Expects FID on Potential Major Oil Discovery by Yearend
- Oil Markets Were Already Positioned for Iran Attack
- Is The Iran Nuclear Deal Revival Project Dead?
- Petrobras Chairman Suspended
- Oil and Gas Executives Predict WTI Oil Price
- An Already Bad Situation in the Red Sea Just Got Worse
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil and Gas Execs Reveal Where They See Henry Hub Price Heading
- Equinor Makes Discovery in North Sea
- Macquarie Strategists Warn of Large Oil Price Correction
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Standard Chartered Reiterates $94 Brent Call
- Chevron, Hess Confident Embattled Merger Will Close Mid-2024
- Analysts Flag 'Remarkable Feature' of 2024 Oil Price Rally